Aggregate demand and aggregate supply

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Question 45
Easy

The diagram below shows a shift in an economy's long-run aggregate supply curve from LRAS1\text{LRAS}_1LRAS1​ to LRAS2\text{LRAS}_2LRAS2​.

Shift in LRAS curve

Which of the following is most likely to represent or cause this shift?

A permanent decrease in the economy's productive capacity

A temporary increase in the prices of imported raw materials

A cyclical decline in actual national output due to lower aggregate demand

An increase in the level of spare capacity within the economy

Aggregate demand and aggregate supply Questions

  1. A Level
  2. /Economics
  3. /Aggregate demand and aggregate supply